An Appraisal of the Role of Commercial Bank in Developing Economy

ABSTRACT

Commercial banks are one of the three primary agents which help circulating funds in the market. Commercial banks provide loans and corporate bonds to the households, new start ups and small medium enterprises to run their businesses. It also obtains money from the households and invests that money to other profitable investments. The money held as customer account then accrues interest which is given to the customer in the form of periodic payments. The commercial banks play an important part of economy when they are involved in bidding process of government securities. Various services and products provided by commercial banks such as car leasing, mortgage financing, credit cards etc provide easy accessibility of funds to the customers. Hence great deal of money circulated in the economy is contributed by the commercial banks. Commercial banks are also an important element in implementing the monetary and fiscal policy by the central bank
Hypothesis were formulated and tested through chi-square statistical test and the findings show commercial banks play diverse roles in developing economy in which Nigeria is not left out.

CHAPTER ONE
1.1 INTRODUCTION
The name bank derives from the Italian word banco "desk/bench", used during the Renaissance era by Florentine bankers, who used to make their transactions above a desk covered by a green tablecloth. However, traces of banking activity can be found even in ancient times. In fact, the word traces its origins back to the Ancient Roman Empire, where moneylenders would set up their stalls in the middle of enclosed courtyards called macella on a long bench called a bancu, from which the words banco and bank are derived. As a moneychanger, the merchant at the bancu did not so much invest money as merely convert the foreign currency into the only legal tender in Rome – that of the Imperial Mint.Commercial banks engage in the following activities: * processing of payments by way of

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